In order to prevent fraudulent or deceptive practices in the market and safeguard consumers, the Federal Trade Commission mandates that businesses be required to furnish specific information or notifications when celebrities are involved in marketing efforts. The FTC possesses the authority to impose fines on both companies and individual celebrities who disseminate false statements or withhold essential details in the market.
According to the FTC Act, social media celebrities are obligated to share various legal information within their online profiles, sponsored posts, or on their websites. More precisely, any sponsored or remunerated endorsements must be identified. If a prominent figure receives compensation for discussing or promoting a brand, they are required to disclose this fact to their audience. This can encompass various scenarios, such as:
- Endorsing a brand as part of a paid partnership with a company.
- Receiving complimentary products.
- Obtaining products or services at a discounted rate.
- Receiving donations to a charitable cause in exchange for endorsements or reviews.
The influencer should prominently include the information accessible within a video or image or position it in an obvious place. They are also required to disclose any familial or personal connections when relevant. However, there's no obligation to disclose if the company didn't compensate or provide any items in exchange for mentioning their brand. If you have a legal agreement with a company, you must disclose your affiliation every time you post on their behalf. Influential figures should be aware that the FTC regulations apply to all types of media, including videos, blogs, and media posts. It's important not to assume that your followers are already aware of your brand associations.